Frequently Asked Questions (FAQ)
This is where you will find some of the most common questions that clients ask when contacting us. Please review these FAQs and let us know if we can be of any help with your current situation.
What are the signs you are in financial distress?
- Creditor calls day and night, calling your job
- Behind on mortgage/car payments
- Paying minimum payment on credit cards and not making a dent in balances
- Borrowing money from family member just to meet basic living expenses
What to expect in consultation?
- Meet with an attorney to discuss your situation
- Determine if bankruptcy is the right choice for you
- Determine the best chapter to pursue
- Payment plans are available
How will bankruptcy affect my credit?
Any bankruptcy is a negative on your credit report. It may stay on your credit report for up to 10 years. Credit reports for those who file for Bankruptcy normally have lower scores at filing. Declaring bankruptcy allows individuals to improve their credit scores in that they are no longer liable for certain debts reported and such debts have been discharged.
Will it ever be possible to buy a house or get a car loan after I file bankruptcy?
Yes. You will be eligible for most FHA loans and VA loans, Conventional mortgages as soon as two to five years after your debts have been discharged. As far as car loans – some car lenders will finance a car for you immediately after your debts are discharged. Chapter 13 bankruptcy often even allows loan approval during your chosen plan if the Trustee approves. Qualification for these loans is not guaranteed and you will probably be charged higher interest rates than a person with good credit until your credit score improves. Once you complete a bankruptcy plan and stay on a good path the rebuilding process to a good credit score and a fresh financial start will be within reach.
Will I be able to get credit after bankruptcy?
In short – Yes. Most people find that shortly after filing Bankruptcy they receive many credit card offers in which will help you rebuild your credit rating if used properly and responsibly.
Will bankruptcy discharge all of my debts?
Bankruptcy discharges your personal liability on unsecured debts. If you continue to make payments on your secured debts, such as your home mortgage, car loan, etc you will retain those assets
by reaffirming the debt. Restructuring of secured debts/contracts is possible within Chapter 12, 13, or 11. Certain unsecured debts, such as student government loans and certain taxes, are not dischargeable in bankruptcy.
How quickly can I file bankruptcy?
Most bankruptcy attorneys will state “the same day you first meet with us”. This might not be the best for your situation. When we visit with our clients in the free consultation we offer, we will review the clients’ specific problems and decide what best suits their situation.
How much will it cost?
The cost will largely depend on the client’s assets and liabilities. Our legal fees are reviewed by the Bankruptcy Courts to ensure that they are fair and reasonable. We offer payment plans for clients as well.
Will I lose my house?
In most cases, you will not lose your home in a bankruptcy case. Texas and federal laws permit a debtor to keep their homestead and their equity in the house. Consult with your lawyer if your home is already in the foreclosure process, or if your mortgage is “upside-down” – you owe more than the home is worth. These situations can affect whether you can keep your home throughout bankruptcy.
If you own additional houses as rental properties or vacation homes, these may not be protected in the same way as your personal home. Your lawyer can advise on your unique situation.
Can I keep my personal property?
Generally, you will be able to keep personal property through the bankruptcy process. Texas and federal laws permit personal vehicles as exempt property, which means that the car that you use for work or school will generally not be liquidated. However, if you own additional cars, boats, or other vehicles, or if you owe more on a car than it is worth, you may be asked to forfeit this property. Other personal property such as your furniture and personal belongings are usually not liquidated in a bankruptcy case.
Will bankruptcy get rid of my student loans?
We wish we could tell you that bankruptcy discharges student loans, but unfortunately, these loans are almost always considered not dischargeable through bankruptcy. There are some circumstances where student loans may be discharged, but these cases are incredibly complicated and rare. However, you may be able to negotiate different repayment terms with your lenders to help your situation.
Are there other debts that are not discharged in bankruptcy?
Besides student loans, other government debts such as traffic tickets, parking fines, criminal fees, and more cannot be discharged through bankruptcy. Additionally, any child support or alimony payments cannot be discharged. You will be required to pay these debts.
When will the collections calls stop?
If creditors are harassing you all day, every day, it can be incredibly stressful. The good news is that once a bankruptcy is filed, these annoying calls from creditors and collections agencies stop immediately. It is part of bankruptcy law that all such creditors cease any communication with you once you file, including lawsuits, foreclosures, wage garnishments, or any other legal actions.
What should I do if I’ve been served a lawsuit?
If you have seriously delinquent debts, your creditors may file lawsuits against you. While this can seem scary, don’t panic. Contact a lawyer immediately. Filing bankruptcy can cease all such legal cases against you.
If I’m married, will my spouse also have to file bankruptcy?
In short, no. Couples are allowed to file for bankruptcy jointly if most of the debts are held jointly, and that makes sense for that couple. However, if the bulk of the debts are for one spouse and the other spouse has little debt and good credit, it may be best for just one spouse to file. In this case, the other spouse will not be required to file, and their credit will not be affected.
Can I be fired for filing bankruptcy?
It’s a common concern to worry that bankruptcy could affect your job, but fortunately, you are protected in this case. Federal law prohibits job discrimination based on a bankruptcy filing.
What is the minimum amount of debt needed to file bankruptcy?
Even if you do not have a tremendous amount of debt, if it is impossible for your situation, you can file for bankruptcy. Everyone’s situation, in terms of debts, assets, and income, is different, and there is no minimum threshold of debt that you need to meet.
Will my name be in the newspaper if I file bankruptcy?
People file for bankruptcy every day, and it’s hardly newsworthy. Most newspapers today don’t even list bankruptcies anymore.
If I’ve filed for bankruptcy in the past, can I file again?
Yes. There are some time restrictions as to when you are allowed to file again, depending on which type of bankruptcy you used in the past, but in general, you are allowed to file again after a certain amount of time.